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Drug company’s subsidies to patients under review

Annie Baxter Oct 15, 2015
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Federal investigators are sniffing around drugmaker Valeant Pharmaceuticals International, which is known for aggressively raising the prices of its drugs. One of the things investigators are asking about? The company’s patient assistance programs.

A lot of big drug companies have these programs, which help uninsured or low-income people afford expensive prescriptions.

“Drug companies know that if patients have to pay a lot of money out of their own pockets for their products, then fewer patients will take their drugs,” said David Howard, a health policy expert at Emory University.

Howard said some drug companies run these programs on their own, a direct way to help patients afford their prescriptions. But he said the rules are different for patients covered by government insurance programs, like Medicare.

Those patients, Howard said, must instead seek help through foundations, which the pharmaceutical companies may support. But there must be an arms-length separation between the companies and the foundations, and the foundations cannot steer patients to a particular drug.

“There are people these programs can benefit, particularly those who struggle with high drug costs and require the medication,” said Aaron Kesselheim, an associate professor of medicine at Harvard Medical School.

But Kesselheim and others said patient assistance programs may steer people to costlier drugs.

“There may be a drug available that costs $50 or $100 that is the safest, most effective drug that you should be on,” said Steve Schondelmeyer, a professor of pharmaceutical economics at the University of Minnesota. “But these programs may take a drug that costs $500 or $1,000 and make it a zero out-of-pocket cost to the patient.”

Schondelmeyer said the employer group or government program then has to foot that extra cost.

“And next year, the premiums will go up. And you will either pay for that as an employee or in taxes,” he said.

Schondelmeyer said it’s hard to tell how big a role patient assistance programs play in driving up drug costs. A lot of the information on the programs is proprietary. But he said they merit investigation, considering that prices for brand-name and specialty drugs are going up 10 percent to 12 percent a year.

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